Numerical recipes in FORTRAN (2nd ed.): the art of scientific computing
Numerical recipes in FORTRAN (2nd ed.): the art of scientific computing
Venture Capital in Information Technology
Venture Capital in Information Technology
A Case for Using Real Options Pricing Analysis to Evaluate Information Technology Project Investment
Information Systems Research
A note on project risk and option values of investments in information technologies
Journal of Management Information Systems
Structure and analysis of IS decision-making processes
European Journal of Information Systems
A real option analysis approach to evaluating digital government investment
dg.o '05 Proceedings of the 2005 national conference on Digital government research
Valuing information technology infrastructures: a growth options approach
Information Technology and Management
50th ANNIVERSARY ARTICLE: Option Pricing: Valuation Models and Applications
Management Science
Computers and Operations Research
Prioritizing a Portfolio of Information Technology Investment Projects
Journal of Management Information Systems
Communicating the value of uncertain information technology investments using an options approach
International Journal of Business Information Systems
Information Technology and Management
Electronic Commerce Research and Applications
Journal of Management Information Systems
Risk Management of Contract Portfolios in IT Services: The Profit-at-Risk Approach
Journal of Management Information Systems
Journal of Management Information Systems
A compound real option and AHP methodology for evaluating ICT business alternatives
Telematics and Informatics
Applications of real option analysis to vendor selection process in IT outsourcing
International Journal of Information Systems and Change Management
IT project portfolio optimization: a risk management approach to software development governance
IBM Journal of Research and Development
How much to spend on flexibility? Determining the value of information system flexibility
Decision Support Systems
Competing or coordinating: IT R&D investment decision making subject to information time lag
Information Technology and Management
An Interdisciplinary Perspective on IT Services Management and Service Science
Journal of Management Information Systems
International Journal of Information Management: The Journal for Information Professionals
Investment timing for mobile payment systems
Proceedings of the 14th Annual International Conference on Electronic Commerce
Valuation of benchmark provisions in IT services contracts
Proceedings of the 14th Annual International Conference on Electronic Commerce
Regulated prices and real options
Telecommunications Policy
ACM Transactions on Management Information Systems (TMIS)
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In this paper, we develop two models for the valuation of information technology (IT) investment projects using the real options approach. The IT investment projects discussed in this paper are categorized into development and acquisition projects, depending upon the time it takes to start benefiting from the IT asset once the decision to invest has been taken. The models account for uncertainty both in the costs and benefits associated with the investment opportunity. Our stochastic cost function for IT development projects incorporates the technical and input cost uncertainties of Pindyck's model (1993), but also considers the fact that the investment costs of some IT projects might change even if no investment takes place. In contrast to other models in the real options literature in which benefits are summarized in the underlying asset value, our model for IT acquisition projects represents these benefits as a stream of stochastic cash flows.